The great yield reset Bond ETFs and the generational opportunity in fixed income

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BlackRock's report "The Great Yield Reset: Bond ETFs and the Generational Opportunity in Fixed Income" presents a groundbreaking shift in the bond investment landscape. Following the tumultuous bond market of the previous year, yields are rejuvenating across most fixed income sectors, prompting robust flows into these assets. This return to higher yield levels has seen investors increasingly gravitate towards bond ETFs as they recalibrate their portfolios, a trend that paradoxically flourished in 2022 amidst market challenges.

Rebirth of Bonds as Ballast: The Resurgence of Bond ETFs

Moreover, BlackRock underscores the re-emergence of the concept of "bonds as ballast". This fundamental notion in portfolio construction—bonds as a potential diversifier to riskier assets—has resurfaced after being absent, particularly in 2022. The desire for transparency, access, liquidity, and efficiency is leading an ever-increasing number of investors to favor bond ETFs. With global bond ETF assets approaching $2 trillion, BlackRock confidently projects that these assets will reach $5 trillion by 2030, if not earlier.

Interested in understanding how the current yield reset can enhance your investment strategy? Click "Report" to explore BlackRock's comprehensive insights on this pivotal shift in the bond market.